Silver is a white, lustrous metallic element that conducts heat and electricity better than any other metal. In ancient times, many silver deposits were on or near the earth's surface. Before 2,500 BC, silver mines were worked in Asia Minor. Around 700 BC, ancient Greeks stamped a turtle on their first silver coins. Silver assumed a key role in the U.S. monetary system in 1792 when Congress based the currency on the silver dollar. However, the U.S. discontinued the use of silver in coinage in 1965. Today Mexico is the only country that uses silver in its circulating coinage.

Silver is the most malleable and ductile of all metals, with the exception of gold. Silver melts at about 962 degrees Celsius and boils at about 2212 degrees Celsius. Silver is not very chemically active, although tarnishing occurs when sulfur and sulfides attack silver, forming silver sulfide on the surface of the metal. Because silver is too soft in its pure form, a hardening agent, usually copper, is mixed into the silver. Copper is usually used as the hardening agent because it does not discolor the silver. The term "sterling silver" refers to silver that contains at least 925 parts of silver per thousand (92.5%) to 75 parts of copper (7.5%).

Silver is usually found combined with other elements in minerals and ores. In the U.S., silver is mined in conjunction with lead, copper, and zinc. In the U.S., Nevada, Idaho, Alaska, and Arizona are the leading silver-producing states. For industrial purposes, silver is used for photography, electrical appliances, glass, and as an antibacterial agent for the health industry.

Silver futures and options are traded on the New York Mercantile Exchange (NYMEX), the Chicago Board of Trade (CBOT), and the London Metal Exchange (LME). Silver futures are traded on the Tokyo Commodity Exchange (TOCOM). The NYMEX silver futures contract calls for the delivery of 5,000 troy ounces of silver (0.999 fineness) and is priced in terms of dollars and cents per troy ounce.

Supply - World mine production of silver in 2009 rose +0.5% yr/yr to a new record high of 21,400 metric tons, continuing to show some improvement after flat production figures in 2000-03. The world's largest silver producers in 2009 were Peru with 18% of world production, China (14%), Mexico (12%), Chile (9%), Australia (8%), and the U.S. (6%). U.S. production of refined silver in 2009 (through August, annualized) fell by 20.8% to an 11-year low of 3,899 metric tons.

Demand - U.S. consumption of silver in 2003 (latest data available) fell -1.0% yr/yr to 175.3 million troy ounces. The largest consumption of silver is for photographic materials with 35% of total usage, followed by electrical contacts and conductors (23%), jewelry (9%), coinage (7%), and brazing alloys and solders (5%). The world's largest consuming nation of silver for industrial purposes is the U.S. with 20% of world consumption in 2004, followed by Japan (16%), India (10%), and Italy (7%).